Lowery v. Colvin

The
motion for attorney's fees under 42 U.S.C. § 406(b)
[Doc. No. 21] is granted in part. The administration is
ordered to pay $10, 000 in attorney's fees to
Lowery's attorney, David Throesch. Because counsel has
already received $6, 436.70 in EAJA fees, Throesch must
refund this amount to Lowery upon receipt of the §
406(b) fees. Gisbrecht v. Barnhart, 535 U.S. 789,
796 (2002).

42
U.S.C. § 406 governs attorney's fees in social
security cases. § 406(a) deals with fees for
representation in the administrative proceedings, and §
406(b) handles fees for representation in federal court. The
statute permits a court to “allow as part of its
judgment a reasonable fee for such representation, not in
excess of 25 percent of the total of the past-due benefits to
which the claimant is entitled by reason of such
judgment.” 42 U.S.C. § 406 (b)(1)(A). Because of
this statute, most social security attorneys will take on a
claimant's case based on a contingency agreement, which
will permit attorney's fees up to the full 25 percent
threshold. In Gisbrecht v. Barnhart, 535 U.S. 789
(2002), the Supreme Court held that this type of contingency
fee agreement was permissible but that federal district
courts are tasked with ensuring that the fee award is
nonetheless reasonable:“We hold that § 406(b) does
not displace contingent-fee agreements within the statutory
ceiling; instead, § 406(b) instructs courts to review
for reasonableness fees yielded by those agreements.”
535 U.S. at 808-09.

The
Supreme Court has instructed district courts to
“approach fee determinations by looking first to the
contingent-fee agreement, then testing it for reasonableness,
” reducing “the attorney's recovery based on
the character of the representation and the results the
representative achieved.” Gisbrecht, 533 U.S.
at 808; see also Id. (citing McGuire v.
Sullivan, 873 F.2d 974, 983 (7th Cir. 1989)
(“Although the contingency agreement should be given
significant weight in fixing a fee, a district judge must
independently assess the reasonableness of its
terms.”)). The Court explicitly held that district
courts are not to begin reasonableness determinations by
looking to the all-familiar lodestar calculation.
Id. at 801-07. Thus, the starting point is the
contingent fee agreement between Lowery and Throesch, which
permits Throesch to be paid 25 percent of Lowery's
past-due benefits. See Doc. No 22, Ex. A. Based on
this fee agreement, the starting amount is $21, 750.

The
next step is to test this amount for reasonableness. Testing
for reasonableness is a task that is common for a district
court judge: “Judges of our district courts are
accustomed to making reasonableness determinations in a wide
variety of contexts, and their assessments in such matters,
in the event of an appeal, ordinarily qualify for highly
respectful review.” Gisbrecht, 535 U.S. at
808. The Supreme Court provided examples of factors for a
district court judge to consider: (1) “the character of
the representation and the results the representative
achieved, ” (2) an attorney's delay when bringing
the case, and (3) benefits that are “large in
comparison to the amount of time counsel spent on the
case.” Gisbrecht, 535 U.S. at 808. There is no
evidence that Throesch delayed in any way during his
representation of Lowery, but Throesch's fee will be
reduced due to the other two examples: based on the character
of the representation and the results Throesch achieved, his
fee would be unreasonably large in comparison to the time
spent on the case.

Permitting
Throesch to recover $ 21, 750 would be an unreasonable
“windfall, ” which district court judges have
been instructed to prevent. Gisbrecht, 535 U.S. at
808. In this case, Throesch filed a complaint, two motions
for extensions of time to file a brief, and a brief on behalf
of Lowery. But, Lowery's case was never considered by a
federal judge. After Throesch filed a brief on Lowery's
behalf, the Social Security Administration filed an unopposed
motion to remand to the Social Security Agency. See
Doc. No. 15. This motion was granted, and the case was
dismissed. See Doc. No. 16. Importantly, §
406(b) governs fees only to compensate an attorney for
representation before the federal court. A different section
of the statute controls fees for representation in
administrative proceedings. See 42 U.S.C. §
406(a).

It
would be unreasonable to permit Throesch to recover $ 21, 750
of his client's past-due recovery based on filing one
brief that was not responded to by the Administration or even
considered by a federal judge. This decision is not made off
the cuff, as it is recognized that Lowery likely would not
have recovered anything if Throesch had not agreed to take
her case to the federal courts. And the agreement to receive
25 percent of her potential recovery likely is what persuaded
Throesch to represent Lowery in federal court in the first
place. Nonetheless, this fee amount based on the work
Throesch provided would result in an impermissible windfall
for Throesch.

Although
this inquiry must begin by looking to the contingent-fee
agreement and then testing it for reasonableness, other
circuit courts of appeals have determined that the lodestar
method may be used when considering reasonableness. See
Jeter v. Astrue, 622 F.3d 371, 382 (5th Cir. 2010) The
lodestar method confirms the initial view that Throesch's
request for $21, 750 is unreasonable: based on the amount of
time spent representing Lowery in federal court, an award of
the total fee would amount to $638.58 per hour. This
“inordinately high fee” clearly would result in a
windfall for Throesch. See Gisbrecht, 535 U.S. at
804-05.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is
true that cases run the gamut of recovery amounts. Some
courts have reduced a request for $14, 734 down to $3,
993.75, Jeter, 622 F.3d at 375-76 (5th Cir. 2010),
reduced a request for $26, 048.73 down to $12, 780,
Lasley v. Commissioner of Social Security, 771 F.3d
308, 308-09 (6th Cir. 2014), or reduced a request for $12,
675 down to $5, 265. Gordon v. Astrue, 361
Fed.App&#39;x 933, 934 (10th Cir. 2010). Other courts have
permitted requests for the full 25% contingent fee, even when
it produces a very high award. See, e.g., Joslyn
v. Barnhart, 389 F.Supp.2d 454 (W.D.N.Y. 2005) (awarding
the attorney $ 38, 116.50). Even though the amounts awarded
under 406(b) have varied widely, one factor remains the same
in each of these cases: it was incumbent upon the district
court judge to test the contingent-fee agreement for
reasonableness. After careful consideration of the work
submitted by Throesch, the fact ...

Our website includes the first part of the main text of the court's opinion.
To read the entire case, you must purchase the decision for download. With purchase,
you also receive any available docket numbers, case citations or footnotes, dissents
and concurrences that accompany the decision.
Docket numbers and/or citations allow you to research a case further or to use a case in a
legal proceeding. Footnotes (if any) include details of the court's decision. If the document contains a simple affirmation or denial without discussion,
there may not be additional text.

Buy This Entire Record For
$7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.